Ex-Diamondback manager spared prison in insider case

NEW YORK | By Basil Katz

NEW YORK Aug 2 A U.S. judge on Thursday
sentenced a former portfolio manager at the Diamondback Capital
Management hedge fund to three years probation, al lowing another
defendant who cooperated in the government's sprawling insider
trading probe to avoid prison.

Anthony Scolaro, 51, pleaded guilty in December 2010 to
trading illegally on a tip that Canada's Axcan Pharma Inc would
be taken private by TPG Capital.

At Thursday's sentencing hearing, U.S. District Judge
William Pauley said insider trading was "a crime motivated by
avarice and calculation."

But the judge did not impose prison time after federal
prosecutor Antonia Apps told him that Scolaro had provided
"substantial information to the government in numerous
investigations."

Pauley ordered Scolaro to pay a $150,000 fine as well as
$125,890 in forfeiture to the government. Scolaro had agreed to
pay roughly $200,000 in a civil settlement last August with the
U.S. Securities and Exchange Commission.

Federal prosecutors have also accused another former
Diamondback employee, Todd Newman, of insider trading. He and
two others face an October trial. [ID: nL2E8HSJD8]

Stamford, Connecticut-based Diamondback has not been accused
of any wrongdoing and has also settled SEC civil charges.

The case is USA v. Anthony Scolaro, U.S. District Court for
the Southern District of New York, No. 11-cr-00429.